Ratios are useful in explaining the:
A)relationships between financial data.
B)differences between companies.
C)trends within industries.
D)reasons for financial performance.

Question

Quizplus · Accepted Answer

Ratios compare different financial data points, allowing for the identification of relationships between them. This can include identifying trends or highlighting areas that need improvement. While ratios can be used to compare companies and industries, their primary usefulness lies in explaining the relationships between financial data. Ratios alone cannot explain reasons for financial performance, as they only provide a snapshot of financial data at a given point in time.

Ratios Are Useful in Explaining The